Li Auto reported a year-on-year rise in first-quarter net income despite largely flat revenue, as the Chinese electric vehicle maker reduced sales and operating expenses. Net income for the quarter rose 9.4% to RMB 646.6 million ($89.1 million), while non-GAAP net income fell 20.5% to RMB 1 billion.
Quarterly revenue reached RMB 25.9 billion, slightly ahead of Bloomberg’s analyst consensus of RMB 25.11 billion and above the company’s guidance range. This marked a 1.1% increase from the same period a year earlier but a sharp 41.4% decline from the fourth quarter of 2024, reflecting seasonal trends such as the Spring Festival.
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Vehicle sales revenue grew 1.8% year-on-year to RMB 24.7 billion, driven by higher delivery volumes. However, the gain was offset by a decline in average selling prices due to product mix changes. Li Auto delivered 92,864 vehicles during the quarter—near the upper end of its forecast—and reported a gross margin of 20.5%, stable year-on-year and slightly improved sequentially.
The company’s vehicle margin rose to 19.8%, up from 19.3% a year earlier, supported by cost reductions and strategic pricing. Meanwhile, research and development spending fell 17.5% year-on-year to RMB 2.5 billion, and selling, general, and administrative expenses dropped 15%, reflecting cuts to compensation and marketing.
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Li Auto ended the quarter with RMB 110.7 billion in cash but recorded negative free cash flow of RMB 2.5 billion, narrowing the loss from RMB 5.1 billion a year earlier. For the second quarter, the company expects to deliver between 123,000 and 128,000 vehicles, representing up to 17.9% growth from a year ago, and forecasts revenue of RMB 32.5 billion to RMB 33.8 billion.